DeVry University sues Dept. of Education over $23M student loan recoupment order

CHICAGO — DeVry University has filed a lawsuit towards the U.S. Department of Education that seeks to dam an order that the Naperville-based for-profit faculty chain pay greater than $23 million to recoup the price of student loans taken out by greater than 600 debtors.

DeVry filed its movement for injunctive aid final week in federal court docket in Chicago. The college alleges that the Department of Education exceeded its authority when it announced earlier this year the approval of about 1,800 “Borrower Defense” claims submitted by former DeVry college students, totaling greater than $71 million.

DeVry contends that the division “lacks the authority to prosecute the Recoupment Action; has exceeded its statutory mandate and violated dispositive procedures in adjudicating the underlying borrower defense claims en masse; and has violated DeVry’s due process rights by failing to provide DeVry with adequate notice or a meaningful opportunity to contest the discharged sums.”

The first listening to within the lawsuit is scheduled for December, in line with federal court docket data.

The order that DeVry cover greater than $23 million got here after the Department of Education discovered that the college misled debtors in regards to the rate at which DeVry college students have been employed upon commencement. The division famous that “these are the first approved borrower defense claims associated with a currently operating institution.”

“The Department found that from 2008 to 2015 DeVry repeatedly misled prospective students across the country with claims that 90 percent of DeVry graduates who actively seek employment obtained jobs in their field of study within six months of graduation,” the division stated in a press release issued final February. “In fact, the institution’s actual job placement rate was around 58 percent. The Department found that more than half of the jobs included in the claimed 90 percent placement rate were held by students who obtained them well before graduating from DeVry and often before they even enrolled.”

In 2016, DeVry and the Federal Trade Commission agreed on a $100 million settlement after the FTC introduced a lawsuit towards the college that additionally alleged deceptive job placement charges for graduates.

In a press release issued earlier this month, DeVry maintained that it by no means misled debtors.

“Our position has always been that any allegation or conclusion that DeVry misled students at any time is wrong, and we strongly believe the Department has mischaracterized DeVry’s calculations and disclosure of graduate outcomes from past advertising,” the college stated in a press release. “It is worth emphasizing that these student claims date back to advertising that was used between 2008 and 2015, predating DeVry’s establishment as an independent institution with a new Board and leadership.”

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